Carbon tax and emission targets: The stand of the major parties
August 30, 2021 | Charles Lin
Image by Wokandapix from Pixabay
Editor’s note: This post was updated September 18.
The Canadian Liberal government has called a federal election for September 20, 2021. In this article, we focus on the carbon tax and emission targets proposed by the five federal parties. The five major federal parties (Liberal, Conservative, New Democratic, Green, Bloc Québécois) all support some variation of the carbon tax. We summarize below the stand of each party, and their emission targets.
Recap: Supreme Court ruling on carbon tax
The Supreme Court ruled in a 6-3 decision in March 2021 the federal government’s carbon tax is constitutional. The ruling ends the legal challenge by three provinces (Alberta, Saskatchewan, Ontario), and allows the government to advance plans to ensure every province and territory in Canada has a carbon pricing policy to reduce greenhouse gas emissions.
- A tax of $20/tonne of emissions was implemented in 2019, increasing to $50/tonne by 2022, and to $170/tonne by 2030. As the federal backstop, 90% of the tax collected by the federal government is returned to consumers through tax rebates.
- Canada’s GHG reduction target is set at 40-45% below 2005 levels by 2030.
- A carbon price to start at $20/tonne and increase to a cap of $50/tonne. The revenue collected is to be paid into “personal low-carbon savings accounts”, for use by consumers for green purchases.
- For industrial emissions, a carbon price tied to the US and EU (European Union) and which could rise to $170/tonne by 2030 for Canada to meet its international commitment to the Paris agreement.
- Commits to a 30% reduction in GHG emissions below 2005 levels by 2030, lower than the Liberals.
New Democratic Party
- A carbon tax that is similar to the Liberal Party with a lower emission threshold for companies to pay the tax, which means companies have to pay the tax on a larger portion of their emissions.
- Target of reducing GHG emissions to 50% below 2005 levels by 2030. Eliminate subsidies for fossil fuels, and establish national and sectoral carbon budgets.
- In addition to a carbon tax in Canada, propose a border tax to incentivize emission reductions.
- Commits to a 60% reduction in GHG emissions below 2005 levels by 2030, a larger amount than the Liberals.
- Emission reduction target of 60% below 2005 levels by 2030.
- End subsidies for fossil fuels.
What does this all mean?
All five major federal parties have proposed some form of carbon tax, a recognition this mechanism will be a key lever for the next government to achieve Canada’s net zero targets. We have highlighted in an earlier article climate change is among the top election issues. Canadians’ understanding of the carbon tax is important to make an informed choice for the election. To understand more about carbon taxation, please see here.
Emission targets are only levels of ambition, and whether Canada meets them remains to be seen. The country’s track record is not encouraging – emissions increased by 3% from 2016 to 2019, and the 2019 emissions are only 1% less than that of 2005. The recent IPCC report concludes we can still limit warming to about 1.5°C, through strong, rapid and sustained reductions in emissions starting now. Canadians can use the upcoming election as a first step to meet the challenge ahead – get informed, vote, and do our part in helping Canada in the net zero journey.
Appendix: Election topics we have covered to date
Charles is a retired atmospheric scientist based in Toronto. He stays busy as founder and lead of ImpactNetZero, keeping healthy in mind and body, and reading stories to his two grandchildren.